Why Updates Are Important In Estate Planning
Many people see estate planning as a one-off thing, especially if they don't have extensive assets. However, an estate planning attorney will want clients to update their documents at least every couple of years. Why are updates such a big deal? Here are three reasons to update the plans for your estate.
Beneficiaries' Circumstances Change
One of the simplest reasons for doing an update to your plans is because the identified beneficiaries will have changing circumstances. You may outlive some of your beneficiaries, for example. Similarly, charitable organizations may cease to exist or begin operating under different names or locations. A person could get married or divorced and change their name, too.
It is a good idea to do an annual review of the contact information for all of your beneficiaries. Since you like these folks so much, you might want to do it around the holidays to have a friendly pretense for doing so. Tell them you're updating contact information for your mailing list, and then you can use the information to make updates to your estate plans.
Your Finances Shift
Most people are not going to maintain the same financial situation over the course of even a single year. Likewise, even a person who has a very stable financial situation can see changes build up over time.
If you've followed a traditional retirement investing strategy, for example, compound returns can take off significantly a few decades into the process. You might not check the numbers all that often, particularly if you take a hands-off approach. That can mean surprising shifts can hit later on, potentially leaving more money than you'd expect. Similarly, a bad year could put a major dent in the numbers.
It is a good idea to review your financial situation annually with an accountant. As things change, you can then discuss the situation with an estate planning attorney. For example, the value of the assets left to a particular beneficiary might be out of proportion to what you wish to give others. You may need to adjust the plan accordingly.
Tax Law Changes
Finally, tax laws will change annually as local, state, and federal governments pass new rules, cut other ones, and allow others to become irrelevant. You will want your estate planning to maximize your tax advantages and those of the beneficiaries as much as possible. If a new law opens up opportunities or poses some challenges, you'll want to respond as soon as possible.
Contact an estate planning attorney near you to learn more.
Share